During a structural review, what is a key factor to assess regarding the fund manager?

In a structural review, the separation of duties within the organization is a crucial aspect to evaluate when assessing a fund manager. This principle ensures that no single individual has control over all aspects of an investment process, which helps to create a system of checks and balances. By having distinct roles for portfolio management, compliance, risk management, and trade execution, a firm can mitigate risks associated with conflicts of interest, reduce the likelihood of errors or fraud, and enhance overall governance.

Having a well-defined separation of duties supports a more robust operational framework, which is essential for safeguarding investor interests and maintaining the integrity of the fund. It contributes to accountability within the organization, allowing for a thorough oversight of the investment process and ensuring that decisions are made in an objective and fair manner. This structural integrity is foundational for establishing trust with investors and regulators alike.

While factors like the fund manager's investment philosophy, fund performance metrics, and current portfolio composition are important considerations, they do not address the operational governance and risk management framework as directly as the separation of duties does.